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Dan Pickell v. Stephen P. Sands

December 5, 2012

DAN PICKELL, PLAINTIFF,
v.
STEPHEN P. SANDS, ET AL.,
DEFENDANTS.



FINDINGS AND RECOMMENDATIONS

This matter came before the court on May 25, 2012, for hearing of defendants' motion to dismiss plaintiff's complaint pursuant to Rule 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. Deputy Attorney General Amy Julia Winn appeared on behalf of defendants Stephen P. Sands, in his official capacity as Registrar of the California Contractors State Licensing Board, and Selvi Stanislaus in her official capacity as Executive Director of the California Franchise Tax Board. Plaintiff appeared in person at the hearing on his own behalf. Oral argument was heard and the motion was taken under submission.

BACKGROUND

In his pro se complaint plaintiff alleges as follows. On or about June 9, 1994, plaintiff obtained a California State Contractors License. (Compl. (Doc. No. 1.) at 3.*fn1 ) On September 20, 2011, the California Contractors State License Board ("CSLB"), issued to R P Heating & Sheet Metal, which plaintiff operated, a Notice of Unsatisfied Final Liability. (Id. at 8.) The notice stated that on September 16, 2011, the California Franchise Tax Board ("FTB") had notified the CSLB of R P Heating & Sheet Metal's outstanding tax liability in the amount of $151,958.36. (Id.) The notice also indicated that pursuant to California Business and Professions Code § 7145.5, proof of the satisfaction of that tax liability from the FTB had to be submitted to the CSLB by November 20, 2011, or plaintiff would have his contractors license suspended. (Id.)

On November 9, 2011, plaintiff sent CSLB a letter challenging the suspension of his contractors license and requesting a hearing. (Id. at 3, 9.) Specifically, plaintiff complained that the use of the word "may" in § 7145.5 indicated that the CSLB was not required to suspend his contractor's license due to the outstanding tax liability, that the tax liability in question bore no rational relationship to the purpose of his contractor's license and therefore could not serve as the basis for the license's suspension and that due process required that he be granted a hearing before being deprived of his license. (Id. at 9-12.) Plaintiff was nonetheless not provided a hearing, was unable to satisfy the outstanding liability and his contractors license was therefore suspended on November 20, 2011. (Id. at 3.)

Plaintiff filed his complaint in this action on February 20, 2012, and paid the required filing fee. Therein, he alleged causes of action for declaratory relief and violation of his constitutional rights including his right to due process pursuant to 42 U.S.C. § 1983. (Compl. (Doc. No. 1.)) Specifically, plaintiff challenges the constitutionality of § 7145.5 on its face, asserting that he has a constitutionally protected property right to his contractor's license which cannot be overcome absent a compelling state interest and that his outstanding tax liability bears no rational relationship to the conditions governing the issuance of that license. (Id. at 1-2, 4-6.) In addition, plaintiff alleges that it was a separate violation of his right to due process to suspend his contractor's license without providing him a hearing before the CSLB. (Id. at 3, 6.)

Defendants filed the motion to dismiss now pending before the court on April 9, 2012. (Doc. No. 7.) Plaintiff filed his opposition on May 2, 2012, and defendants filed their reply on May 16, 2012.*fn2 (Doc. Nos. 9 and 10.) Plaintiff filed an unauthorized sur-reply on May 23, 2012.*fn3 (Doc. No. 12.)

STANDARD

Federal Rule of Civil Procedure 12(b)(1) allows a defendant to raise the defense, by motion, that the court lacks jurisdiction over the subject matter of an entire action or of specific claims alleged in the action. "A motion to dismiss for lack of subject matter jurisdiction may either attack the allegations of the complaint or may be made as a 'speaking motion' attacking the existence of subject matter jurisdiction in fact." Thornhill Publ'g Co. v. Gen. Tel. & Elecs. Corp., 594 F.2d 730, 733 (9th Cir. 1979).

When a party brings a facial attack to subject matter jurisdiction, that party contends that the allegations of jurisdiction contained in the complaint are insufficient on their face to demonstrate the existence of jurisdiction. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a Rule 12(b)(1) motion of this type, the plaintiff is entitled to safeguards similar to those applicable when a Rule 12(b)(6) motion is made.*fn4 See Sea Vessel Inc. v. Reyes, 23 F.3d 345, 347 (11th Cir. 1994); Osborn v. United States, 918 F.2d 724, 729 n. 6 (8th Cir. 1990). The factual allegations of the complaint are presumed to be true, and the motion is granted only if the plaintiff fails to allege an element necessary for subject matter jurisdiction. Savage v. Glendale Union High Sch. Dist. No. 205, 343 F.3d 1036, 1039 n. 1 (9th Cir. 2003); Miranda v. Reno, 238 F.3d 1156, 1157 n. 1 (9th Cir. 2001). Nonetheless, district courts "may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment" when resolving a facial attack. Safe Air for Everyone, 373 F.3d at 1039.

When a Rule 12(b)(1) motion attacks the existence of subject matter jurisdiction in fact, no presumption of truthfulness attaches to the plaintiff's allegations. Thornhill Publ'g Co., 594 F.2d at 733. "[T]he district court is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). When a Rule 12(b)(1) motion attacks the existence of subject matter jurisdiction in fact, plaintiff has the burden of proving that jurisdiction does in fact exist. Thornhill Publ'g Co., 594 F.2d at 733.

The purpose of a motion to dismiss pursuant to Rule 12(b)(6), on the other hand, is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general, pro se complaints are held to less stringent standards than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520-21 (1972). However, the court need not assume the truth of legal conclusions cast in the form of factual allegations. United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. See also Iqbal, 556 U.S. at 676 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

In ruling on the motion, the court is permitted to consider material which is properly submitted as part of the complaint, documents that are not physically attached to the complaint if their authenticity is not contested and the plaintiff's complaint necessarily relies on them, and matters of ...


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